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More restaurant operators were able to pay their rent in January

Thirty-eight percent of small restaurants were delinquent on rent in January, a marked improvement from 52% in December.

Independent restaurant operators continue to manage a confluence of challenges, but January’s rent picture provided a thin silver lining relative to previous months.

According to new data from Alignable, 38% of small restaurants were delinquent on rent in January, versus 52% in December. January’s data was also more favorable than November’s (42%) and October (49%). Typically, December is a strong month for independent restaurant sales as more people are out and about shopping and celebrating. This may have created healthier cash flows for January's bills. 

That said, minority-owned businesses continue to struggle at a higher rate, with 56% of such businesses unable to cover January rent, up 6% from December and the highest rate among minority-owned small businesses since last May. Further, nearly four out of 10 independent restaurant owners are still unable to pay rent, continuing a grim picture that has escalated throughout the pandemic. Overall, inquiries about how to avoid rent delinquencies have increased “significantly” since the pandemic began, according to Texas Restaurant Association CEO and president Emily Williams Knight. In response, the association has created the Texas Law Center to help operators better understand lease terms.

Others are calling for changes to restaurants rent models all together. For now, operators have to continue navigating inflationary pressures at nearly every stop. Over 50% of small business owners, for instance, say their rent is higher now than it was six months ago.

Still, Alignable’s data shows that rent delinquencies for small businesses overall are at 30%, calling that number “encouraging” compared to recent months. Alignable has been tracking this data since March 2020 based on input from nearly 6,000 randomly selected business owners.

Contact Alicia Kelso at [email protected]


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